Fiscal Commissioner on Debt Crisis: 'You Better Get Yourself a Cave in the Adirondacks'

CNS News ^ | 10/2/2012 | Elizabeth Harrington

[IbJensen]

(CNSNews.com) – Former Sen. Alan Simpson (R-Wyo.) said Tuesday the first presidential debate will “be the biggest tap dance since Fred Astaire,” and that neither political party in Washington is willing to tackle the country’s fiscal problems.

"You better get yourself a cave in the Adirondacks," he mirthfully said when asked what would happen if politicians did not deal with the debt.

Simpson, who along with Erksine Bowles co-chaired the National Commission on Fiscal Responsibility and Reform, appeared at George Washington University for an event on the upcoming election and the approaching fiscal cliff.

After the event CNSNews.com asked Simpson what he expects to see during the first debate on Wednesday evening.

“I think it’ll be the biggest tap dance since Fred Astaire,” he said. “There’ll be marvelous dancing and oh, it’ll be a joy.”

CNSNews.com then asked, “You mentioned that the debt, that would be one of the big things that you would like to see out of the debate, why do you think there hasn’t been much discussion about this $16 trillion debt in this election?”

“It’s because it’s too sensitive, and when you have people say these people are more interested in the debt than they are human beings, and on and on it goes,” Simpson said. “Where you talk about the most vulnerable in society and the odd thing is those are the people who are going to be hurt the worst by not doing anything.”

When asked which candidate he believes would better approach the debt and deficit, Simpson said neither President Obama or his challenger Mitt Romney would fix the problems.

“If they were going to deal with it, they would’ve done it,” he said. “I mean there’s a campaign going on, and neither one of them are dealing with it in any positive way that gets anywhere. They both talk about it, and they both like Bowles-Simpson and you get into specifics, and they’re gone.

“So they’re not going to deal with it – it doesn’t matter which candidate or candidate for Senate or the House,” Simpson said. “They’re not going to deal with these issues because they will get eaten by rats, by the AARP [American Association of Retired Persons] and Grover Norquist and the realtors.

"everybody out there got hit. We hit everybody,” he said of his deficit plan. “And that’s the only way this can work, and when you have 105 groups out there to rip up anything you do, then they’re not going to do anything. They’re not going to touch it.”

CNSNews.com then asked, “What happens if nothing is done?”

“Well, you better get yourself a cave in the Adirondacks and learn how to eat watery gruel and herbs and berries,” he said. “No, I tell you what’ll happen. The markets will shoot the hole through us.”

“And at that point – and you don’t want it to happen, and I don’t – and they don’t care about Democrats or Republicans or presidents. They care about their money,” Simpson added. “And they’ll say if any country is stupid enough to borrow $16 trillion bucks in the hole, then we’re just stupid enough—smart enough, maybe—to loan you some more money.

“And when they do that, then our country will take a real hit, and inflation will go up and interest rates will go up, and you and your young people your age will be the ones most affected, while the seniors and the money guys, most of them, will take good care of themselves,” he said.

The Simpson-Bowles National Commission on Fiscal Responsibility and Reform, appointed by President Obama, proposed a six-part plan to “put our nation back on a path to fiscal health, promote economic growth, and protect the most vulnerable among us.”

Taken as a whole, the plan, which was released in December 2010, would have achieved nearly $4 trillion in deficit reduction through 2020, more than any effort in the nation’s history.

[IbJensen]

Video at link.

Too bad many of us don't have the pension and perks that Simpson gets and we don't get what the 'government created' largess Obozo will get!

The second most socialist president after obama, had enough wisdom to warn America against public sector unions. He was fearful of what that would do to damage his governmental institutions. If you directly pit the public workers against the people, the people would rise up and demand that government be sliced.

[Buckeye McFrog]

Apparently Simpson is paying no attention to Paul Ryan’s stump speeches

[LibLieSlayer]

I want to know how much of our debt that old simpson voted FOR... my guess is the majority of it.

LLS

[PoloSec]

‘You Better Get Yourself a Cave in the Adirondacks’

Makes me wonder how many caves are in the Adirondacks, and is it already too late to get one.

[familyop]

"'You better get yourself a cave in the Adirondacks,...'"

So he recommends that the superior folks in socialist leadership move to little hills in New York. That's pretty funny.

I have a better idea. Start up the vacations to Venus for the geniuses who brought this economy ("The Marching Morons," Cyril Kornbluth).

[chris37]

I got some tents and a bunch of camping and survival gear.

[familyop]

“'They’re not going to deal with these issues because they will get eaten by rats, by the AARP [American Association of Retired Persons] and Grover Norquist and the realtors.'"

He's right about that, although there are quite a few more socialist subgroups involved. People receiving federal funding for their over-regulating local government rackets do receive a huge chunk of the debt. And what for? For misinforming young folks and robbing those who attempt to start a new, small business or do something for themselves.

[Gaffer]

might be nice digs, but that’s in enemy territory as far as I’m concerned.

[bunkerhill7]

There is one cave on my old farm - It`s a limestone vertical shaft but too narrow off-tunnels to go sideways. My friend who lives at the base of Bear Mountain has a cave on the edge of her property but there`s a bear in it.

[Pining_4_TX]

Simpson is an old fool. He thinks raising taxes will do some good. The problem is spending, not revenue, and the more money we give the crooks in Washington, the more they will spend.

Why should anyone pay one cent more in taxes when the government wastes so much of what they get now? So government agencies can go on more expensive trips? So more can be stolen from HUD and Medicare and Medicaid? Billions are stolen from us now, and nobody seems to care.

[StAnDeliver]

“Well, you better get yourself a cave in the Adirondacks and learn how to eat watery gruel and herbs and berries,” he said. “No, I tell you what’ll happen. The markets will shoot the hole through us.” “And at that point – and you don’t want it to happen, and I don’t – and they don’t care about Democrats or Republicans or presidents. They care about their money,” Simpson added. “And they’ll say if any country is stupid enough to borrow $16 trillion bucks in the hole, then we’re just stupid enough—smart enough, maybe—to loan you some more money. “And when they do that, then our country will take a real hit, and inflation will go up and interest rates will go up, and you and your young people your age will be the ones most affected, while the seniors and the money guys, most of them, will take good care of themselves,” he said."

[LibLieSlayer]

AMEN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

LLS

[NVDave]

The single biggest reason to raise taxes is so that there are no freeloaders. Everyone has to have skin in the game, or you get what we have now: a huge subclass of grifters who pay nothing, and expect everything.

No one who is able-bodied should get a free ride.

Now, that either means cutting welfare, entitlements and hand-outs (which I’m all in favor of), or raising taxes. I’m all in favor of cutting graft, corruption, theft, etc.

Let’s say we do all of that. Guess how much the US budget goes up next year if we add no new spending in real dollars?

About $800B. That’s how fast the entitlement schemes are blowing up on a per-year basis under the demographic bulge that is the baby boom generation. That’s what Simpson is really getting at.

Second, Simpson isn’t a fool on this: He looked at the debt profile of the US and the maturity of the debt, and he came to the conclusion that to get this paid down before it really gets out of control in 4+ years, we have to raise taxes to pay for the spending that’s already been done. He’s looking at preserving the US dollar as having some worth. At the rate we’re going, we’ll have a currency which is going to lose the confidence of the world very rapidly, and when that happens, an implied advantage the US has enjoyed since WWII will vanish. And in the WWII and before days, when the US was an exporter nation, it was just fine that the US dollar wasn’t the international settlement currency.

Now, with so much of our economic inputs being imported, we enjoy a very large advantage that so many products and commodities the world over are priced in dollars. Imagine if oil went to $300/bbl. That could happen... if oil isn’t priced in dollars any longer. We enjoy a big advantage by having the currency that everyone is using as the world’s reserve currency.

The problem here on FR is that too many people haven’t read either the Simpson-Bowles plan or Ryan’s plan. Here’s a free tip: Ryan’s plan doesn’t balance the budget until decades out, and on that it makes rosy economic assumptions of GDP growth. At the conclusion of Ryan’s timeline in 2023, we still have a $400B/year deficit, and we’re still racking up debt. Ryan’s plan calls for tax revenues to go up to 19% of GDP (from under 16% of GDP right now) by 2025. So taxes are going up under Ryan’s plan.

At the current rate we’re racking up debt, IMO we have less than four years before the house of cards implodes and we’re in the same boat as nations in Europe. If Ryan got his way on EVERYTHING right now, this instant, that tipping point might move out a year - at most. Ryan’s plan simply doesn’t reduce the deficit fast enough.

We need cuts made with a chainsaw and ox-acetylene torch, not a scalpel. We need to do drastic things like say “We’re cutting $500B THIS YEAR from the budget.” And we need to say the same thing again next year. And the year after that. Because, as I noted above, even if we shut down Congress and installed a company of Marines to shoot anyone who tried to enter Congress to enact new spending legislation, the budget climb is now on autopilot. The entitlement schemes are now about to bankrupt us. No one is addressing this issue seriously. And by “seriously” I mean “some people are going to see their benefits cut.”

No one is out there proposing the level of cuts necessary. No one. And that’s part of why I think the Tea Party people are so tepid on Romney/Ryan. On the true nature of spending, neither candidate is anything remotely fiscally prudent.

[1010RD]

If interest rates had risen naturally in the face of the banking/RE crisis Obama would not have been able to jam all that debt down our throats. The artificially low interest rates are what let them get away with this, along with a “crisis”.

[NVDave]

Very true.

But that’s part of what Simpson is looking at in the S-B analysis: That rates CANNOT stay this low forever. They just can’t.

Thanks to how the US Treasury and the Fed have pursued this “warping” of the yield curve, the Treasury’s debt duration has been coming in on the yield curve - meaning that when interest rates do go up, the interest on the US debt will explode upwards, because the US treasury will have to roll so much paper every year due to the short maturity of the Treasury’s debt portfolio.

The pisser of this all is, when rates go up, there won’t be much we can do to stop them. The Fed has done everything in their power to keep rates low, using one bizarre intervention after another, but in the end, we are issuing so much debt that once the situation in Europe calms down and investors are no longer looking for the “safe haven” to park huge amounts of money, there will be a sell-off in Treasury debt and not a whole lot of clamor to buy new Treasury debt at such absurdly low rates relative to inflation.

Simpson, to his credit, actually worries about this issue. Ryan doesn’t. And that’s why I find it difficult to take Ryan’s plan seriously. BTW, I’ve talked to a bunch of folks in Wyoming who actually know Simpson - and they agree that sometimes, he’s rather short with people, sometimes he doesn’t toe the line on some things Wyomingites want, but overall, they paint him as a pretty straight shooter - he tells you what he’s actually thinking, instead of what he thinks you want to hear.

[VideoDoctor]

Alan "Homer" Simpson has spoken. (yawn)

[1010RD]

How much of Ryan’s plan is just political positioning? How do you stop kicking the can down the road in DC given the political climate?

We know what’s wrong. We know that the Feds response was good for those politically connected in the finance system, yet bad for the country. How do you sell austerity and high interest rates to Americans? We have to get the patient to take their medicine.

Keep in mind that despite all of Obama’s hard left actions and beliefs, if the economy were purring along he’d be re-elected in a landslide.

[NVDave]

Selling high interest rates to those who saved and want to retire is easy.

Selling high interest rates to the hucksters of the NAR, that’s the problem. The NAR should be indicted for fraud, but that’s another issue.

“Austerity” is a word thrown around quite a bit. I don’t think people know what it means.

Cutting Big Bird and PBS funding isn’t “austerity.”

[1010RD]

I agree and the NAR lobbied big time for the current RE crisis. Their goals aren't national goals. Hence the need to reestablish the meaning of “general welfare”.

On “austerity” given that the media is portraying Spain's approach as austerity I'd say austerity hasn't been tried anywhere. Clearly, with real life real-time examples from both Europe and Japan we know that “not austerity” doesn't work.

I simply don't see a politically palatable way to introduce real austerity. Can you cut $400 billion from fiscal year 2012-2013 and get it to pass while holding your majorities? It will take two years to prove you're correct, but the pain is instant.

We know we're correct, but look at the votes in Congress to pass it. How can it be done?

[NVDave]

It could be done if the GOP got better leadership, but they won’t.

The first thing to do is give the DNC what they want: They want higher taxes, give them higher taxes — on their people. Repeal the Hollywood/film tax breaks, for example. Go after the big banks, which helped pu BHO into office. Go after certain non-profits which are PAC’s that are masquerading as charities.

Then start chopping various pet programs. There’s tons of them.

Now, offer up a defense cut to make it appear that the DNC is getting what they want. The Littoral Combat Ship project is as stupid as it comes (an aluminum superstructure on a steel hull - somewhere, an engineer should be fired for that bit of stupidity), then start ID’ing the cuts for the next round.

It could be done, but the current GOP leadership would love to go hog-wild on earmarks again, so The Stupid Party is almost as bad on the spending as The Evil Party.